Marshalls still confident despite tough first half

Landscaping and building products and supplier Marshalls reported a 13% decline in revenue for the first half on Monday, amounting to £306.7m.

The FTSE 250 company said adjusted EBITDA fell 14% to £50.6m, and adjusted operating profit dropped 19% to £34m.

Its adjusted profit before tax was down 20% to £26.6m, while adjusted basic earnings per share decreased 23% to 7.9p.

The adjusted annualised return on capital employed (ROCE) also declined by three percentage points to 7.6%.

Despite the challenges, the company managed to strengthen its balance sheet, reducing net debt to £155.8m from £184.6m in the same period last year.

The interim dividend remained steady at 2.6p.

On a reported basis, operating profit increased 8% to £28.9m, profit before tax rose 29% to £21.5m, and basic earnings per share improved by 23% to 6.4p.

The company acknowledged difficulties in its landscape products division, but highlighted ongoing self-help measures aimed at improving performance.

Looking ahead, Marshalls’ board maintained that the full-year results were set to align with previous forecasts.

“The group has delivered a resilient performance in weak end markets,” said chief executive officer Matt Pullen.

“The result in the first half is encouraging and demonstrates that the strategy of diversification, building on the group's historic core landscape products business, through the acquisition and improvement of less cyclical businesses in recent years, has resulted in a more balanced group.

“In addition, we have maintained our focus on tightly controlling costs and working capital.” Pullen said the company was”cautiously optimistic” of a modest improvement in end markets during the second half, predicated on a progressive improvement in the macroeconomic environment.

“Against this backdrop and with the benefit of ongoing management actions, the board believes that profitability and pre-IFRS 16 net debt for the full year will be broadly in-line with its previous expectations.”

At 0834 BST, shares in Marshalls were down 3.82% at 327p.

Reporting by Josh White for Sharecast.com.